Presentation to Bell Potter Emerging Leaders Conference Following is - PDF document

25 October 2017 ASX release Presentation to Bell Potter Emerging Leaders Conference Following is Pioneer Credit Limited’s (ASX: PNC) presentation to Bell Potter’s Emerging Leaders Conference being held today. The Company reminds shareholders and looks forward to welcoming them to the 2017 Annual General Meeting, being held on Friday 27 October 2017 at Level 8, Exchange Tower, 2 The Esplanade, Perth at 10 a.m. Investor and media enquiries: Keith R. John Mr Leslie Crockett Managing Director Chief Financial Officer Pioneer Credit Limited Pioneer Credit Limited P: 08 9323 5001 P: 08 9323 5008 E: krjohn@pioneercredit.com.au E: lcrockett@pioneercredit.com.au

25 October 2017 Bell Potter: Emerging Leaders Conference

2 Important notice: Disclaimer This presentation has been prepared by Pioneer Credit Limited (“Pioneer”). Disclaimer: This presentation contains information about Pioneer’s activities current as at the date of the presentation and should not be considered to be comprehensive or to comprise all the information that an investor should consider when making an investment decision. This information is provided in summary form and is not considered to be comprehensive or complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. Investors should consult with their own legal, tax, business and/or financial advisors in connection with any investment decision. Any forward-looking statements included in this presentation speak only as at the date of the presentation and undue reliance should not be placed upon such statements. Although Pioneer believes the forward looking statements to be reasonable, they are not certain. To the maximum extent permitted by law, responsibility for the accuracy or completeness of any forward-looking statement whether as a result of new information, future events or results or otherwise is disclaimed. Subject to applicable disclosure requirements Pioneer is under no obligation to update any of the forward-looking statements contained in this presentation. Monetary Values: Unless otherwise stated, all dollar values are in Australian dollars (A$). The information in this presentation is subject to change without notice.

3 Corporate snapshot Financial services provider with meaningful levels of founder, board and management ownership Overview Largest shareholders • Specialist acquirer and servicer of ‘Tier 1’ 1 retail customer accounts Keith John 2,3 ( Managing Director) 13.43% • Operates a unique, customer-centric service platform OC Funds Management 6.10% • Offices in Perth, Australia and Manila, Philippines Celeste Funds Management 5.33% Management 3 ( ex Keith John ) • Portfolio across Australia (97%) and New Zealand (3%) 6.78% Capital structure Share price + daily shares traded 12 mths to Oct ‘17 (ths/$) Share price 18-Oct-17 $2.83 800 2.90 Shares on issue 61.2m 2.70 600 Market capitalisation 18-Oct-17 $173.2m 2.50 Cash 30-Sep-17 $4.2m 2.30 400 Debt 30-Sep-17 $93.5m 2.10 Enterprise value $262.5m 1.90 200 1.70 Portfolio assets at carrying value 30-Jun-17 $164.5m 0 1.50 Volume Share Price Note: 1. Customers not regarded as credit impaired when originated 2. Includes 500,000 indeterminate rights, subject to shareholder approval 3. Includes Equity Incentive Plan rights, intended to be acquired on market

4 Custodians of shareholder wealth Significant level of management ownership with incentives based on sustainable performance Management ownership Key aspects of EIP • Every Executive KMP 3 member holds equity in Pioneer • 14 participants – diverse and committed executives across entire business • No Short Term Incentives – fixed base salary only for KMP (ex. COO and selected • Every Executive and senior manager participates in the Equity Incentive Plan (EIP) direct reports) o Aligns to strategic goals by appropriately incentivising • EIP provides rights vesting over years 3 to 5 from issue, intended to be acquired on Executive KMP such that they are accountable for the market, ensuring no dilution to shareholders most significant part of tenure of acquired assets Equity 1,2 Loans to KMP (ex MD) Keith John – Managing Director 13.43% • Post year end four executives entered into interest bearing loan agreements for shares Management (ex Keith John) 6.78% • 250,000 shares issued to each executive ($571,600 loan each) • Significant risk for executives, secured against new shares and any other PNC equity, Total management ownership 20.21% reflecting strong long term commitment to Pioneer’s success Note: 1. Includes performance or indeterminate rights, intended to be acquired on market 2. Shareholdings based on fully diluted equity structure and includes 500,000 indeterminate rights, subject to shareholder approval 3. Executive KMP (Key Management Personnel) includes MD, COO, CFO, CRO and General Counsel

5 Leadership Principles A values based framework that underpin and drive great outcomes for all stakeholders

6 How is Pioneer different? Customer centric service that improves creditworthiness and likelihood of full repayment Typical debt purchasers Pioneer’s competitive advantage ‘ Tier 1’ 1 customer portfolios with a preference for PDP  Premium data analytics facilitates Most classes of unsecured debt, incl. Part IX, bankruptcy, telco, utility, payday, SACC, MACC credit cards and personal loans selection of lower risk portfolios selection Reputation-based Bargaining Price-based  Unique brand and reputation offering Relationship management, customer-centric service for PDPs for vendor partners Individual transaction focused and strong track record of compliance Liquidation  Flexible payment schedules optimise 1 to 6 year collection cycle Liquidation profile up to 10 years profile total liquidations Find the individual capable of paying Enable the consumer to be able to pay Process and  Predictable revenue with vendor Artificial deadlines and incentive structures Personal account managers restructure loans and customer partnerships promoting long term that prioritise immediate payment develop tailored repayment plans to guide customers customer relationships relationship through their financial recovery One size fits all servicing approach Note: 1. Customers not regarded as credit impaired when originated

7 How is Pioneer different? (cont.) A differentiated offering and higher standards drive great outcomes for our customers and vendors Key vendor selection Pioneer’s competitive advantage considerations • Employs strict investment discipline Purchase certainty for  Preferred by vendors - Pioneer has never • Invest at a long term sustainable price defaulted on a PDP agreement vendors and Pioneer • Disciplined to not invest when return rate hurdles not met • No low quality customer portfolios – No Part IX, bankruptcy, telco, utility, payday, SACC, MACC  NPS of +13 provides vendors certainty in our Vendor brand protection servicing and great customer outcomes • Net Promoter Score used to measure, evaluate and grow customer relationships • Never had a negative outcome with Ombudsman  Reduces operational cost and underpins continued • Never had a reportable systemic issue Unique compliance record Pioneers growth against the sector trend • Never had a regulatory enforceable undertaking • Unique record among major market participants

8 FY17 Profit and loss Another year of outperforming expectations, FY18 forecast to be very strong • Funding capacity increased to $120m FY16 FY17 Current borrowings at $86.4m, unused capacity of $33.6m o PDP Liquidations $61.9m $70.7m +14% Debt/Portfolio Value (LVR) target of 50% maintained (48.88% o Net revenue $47.8m $56.3m +18% at 30 June 17) EBITDA 1 $31.2m $35.0m +12% • Forecast PDP investment of $70m – now contracted Earliest time in an FY 100% investment achieved EBIT $15.4m $17.4m +13% o High quality portfolios, at attractive price points o NPAT $9.5m $10.8m +14% Capacity to consider significant other portfolios that arise o EPS 20.36cps 20.77cps +2% • Expected FY18 EPS +48% and NPAT of at least $16m DPS 9.80cps 9.50cps -3% o Dividends expected to continue at 50% of NPAT, fully franked Note: 1. EBITDA is before Change in Value (non-cash) movement 2. CIV / PDP liquidations